In 2019, you clearly can build a successful SaaS and Cloud company outside the Bay Area.
And it is just sooo expensive here in the Bay Area. Like crazy expensive. And aren’t we all moving to distributed teams?
Still, networks matter. And finding veterans that have done it before really helps, especially as you scale. And where are these networks and veterans?
Well, at least in SaaS, they are still in the Bay Area. For now at least.
I took a quick weighted look at the BVP Cloud Index, and added in a few recent IPOs — Slack, Zoom, etc. — almost all of which are in the Bay Area, too. Weighted by market cap, 80% of public Cloud and SaaS companies are still in the SF Bay Area:
There are many ways to slice this data. You could add in Microsoft, Amazon and Google and it would plummet to 50/50. You could add in SAP and Oracle and it would go back up closer to 80/20. You could remove Adobe and Paypal, and then it would be 70/30. And more of the next-generation, from Canva on, is from outside the Bay Area.
Still, the Bay Area remains where it is at for Cloud and SaaS.
So what conclusions can we draw?
Well, build your SaaS company where you can best build it. You can do it from London, from Paris, from Toronto, from Syndey.
But if you are OK coming to the Bay Area, and especially, if you sell into tech and/or partner with other Cloud and SaaS companies, I say still come. At least some of the founders. Most everyone else is still here.
That still helps you scale.
And you’ll need all the help you can get.
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Jason Lemkin, Khareem Sudlow
